Minnesota’s much beleaguered construction sector saw a slight uptick in jobs over the course of 2011, with specialty trades adding jobs over a 12-month period for the first time since 2006, according to figures out Thursday from the state Department of Employment and Economic Development.

Baby steps for Minnesota construction jobs in 2011

More construction workers in Minnesota were employed in 2011 than in previous years, according to state data released Thursday. Workers put the finishing touches last month on a new skyway connecting the Accenture Tower with the Ameriprise Financial Center in downtown Minneapolis. (File photo: Bill Klotz)

State’s unemployment rate is 5.7 percent, lowest since 2008

Minnesota’s much beleaguered construction sector saw a slight uptick in jobs over the course of 2011, with specialty trades adding jobs over a 12-month period for the first time since 2006, according to figures out Thursday from the state Department of Employment and Economic Development.

The state’s overall unemployment rate, meanwhile, fell two-tenths of a percentage point, to 5.7 percent, in December, its lowest level since before the financial panic of 2008. The U.S. unemployment rate was 8.5 percent in December.

“The Minnesota unemployment rate continues to move in the right direction, reaching its lowest level since September 2008,” DEED Commissioner Mark Phillips said in a news release. “The labor market is recovering at a slow but steady pace.”

Unlike in previous months, the state also gained jobs in December. Minnesota increased its jobs count by 7,900 for the month and 25,300 for the year. Construction lost 1,700 jobs for the month but was still up 200 for the year.

The unemployment rate and the jobs count are based on different surveys with different methodologies. Steve Hine, research director for DEED’s Labor Market Information Office, suspects a clearer jobs picture for 2011 will be available after the office’s annual review of data, which is due March 1.

Hine nevertheless says the December numbers demonstrate a “building of continued momentum” in boosting employment. Since August, Minnesota’s unemployment rate has fallen 1.5 points — the largest four-month drop in the state’s records, which go back to 1976.

Hine still cautioned that a host of factors — from the European sovereign debt crisis to the fate of the payroll tax cut and unemployment insurance in Congress — could slow jobs growth later this year.

It also isn’t entirely clear why Minnesota’s unemployment rate fell that much. Some of the drop can be tied to the 13,850 unemployed people in Minnesota who stopped looking for jobs between August and December, reducing the state’s labor force participation rate from 72 to 71.5 percent. But Hine has counted many more people finding employment.

In the construction sector, 2011 appears to be the year when employment turned a corner. But recovering roughly 50,000 construction jobs lost in the recession could be daunting.

“It’s all good news when we start adding projects and jobs, but we have a long ways to go. A lot of people say we’ll never get to that point again, that we’ll never recover, but I don’t necessarily buy into that,” said David Semerad, chief executive officer of the Associated General Contractors of Minnesota.

Jobs related to construction of buildings, including residential buildings, started showing 12-month gains in June, followed by the overall construction industry in October. Then in December, the number of Minnesota specialty trade contractors, at 50,988, was up 1.1 percent over the previous 12 months. It was the first 12-month jobs gain in the specialty trades since early 2006.

“The specialty contractors did better than the others,” Semerad said. “There’s a lot of smaller work being done that doesn’t have to be done with a general contractor. Businesses are updating their heating and ventilating and electrical systems. They’re fixing what they have.”

Specialty contractors post-recession have found their own market niches to sustain cash flow, Semerad said.

Heavy and civil engineering has become a weak spot in Minnesota’s construction sector, with jobs down 25.2 percent, to 7,069, during the 12 months ending in December.

Much of the reduction is the result of government belt tightening, a situation that Semerad thinks could be remedied if the state Legislature passes a robust bonding bill this year. Semerad says the construction of a Minnesota Vikings stadium could be a “game changer for Minnesota’s economy.”
Although legislators passed a $531 million bonding bill in July, the impact apparently has not shown up yet in employment numbers. Gov. Mark Dayton this week requested $775 million for projects throughout the state, but Republican majority leaders in the Legislature said they want roughly half that amount.